Letter: Good news at the top, but house prices remain low

Sir: Anne Spackman ('Under pressure to move down', 9 June) asserts that the Halifax House Price Index fails to measure what is happening at the top end of the property market when 'recovery is coming from the top'.

The Halifax Index is mix-adjusted. It samples what is happening in all geographical parts of the market and in properties of all sizes and qualities. The index is produced on a fully-adjusted basis to avoid any skew either to the top or the bottom end of the market. The fact that we are more active in lending to the semi-detached market than to the Mayfair market is irrelevant. Provided the sample size at the top end of the market is sufficiently large to recognise what is happening there, these movements will be properly reflected in the total index. With around 16,000 prices measured monthly, we have confidence that our sample is more than adequate.

It may well be that prices in Mayfair and Kensington are showing a strong recovery. The value of the Halifax Index is that it puts such anecdotal evidence from a tiny part of the total market in a proper national context. As we reported in May, this shows that prices are not yet

recovering.

Yours sincerely,

DAVID GI LCHRIST

General Manager

Corporate Development

Halifax Building Society

Halifax, West Yorkshire

9 June